"Federal authorities in the first-of-its-kind game-console-modding criminal trial abruptly dropped their prosecution Thursday, "based on fairness and justice." Following procedural rulings made by the presiding judge in the aftermath of his 30-minute tirade yesterday, it emerged that a key witness, an employee of the Entertainment Software Alliance, had provided a pirated game to the defendant during the course of his investigation. As this detail had been known to the government for almost a week but had been withheld from the defense, prosecutors had no choice but to move for a dismissal."

Backups don't exist for console games. Regardless of why you cracked the console and DRM on the games you've still broken the relevant laws.

Well, we're talking about two different laws here. One is violating the DMCA by modding a console. The other is piracy. If you take a game that you legally own and burn a copy of it, it is technically a copy and not a pirated game. Obviously, the prosecution considered the difference between a backup and pirated copy important enough for their case to make the distinction.

All I'm saying is that if I were using pirated games (and not backups) to test mods, I would certainly not advertise the fact that it was pirated. Sure, I might get in trouble for modding, but why make it worse for myself by introducing piracy into the mix?

The ESA investigator deliberately took a pirated game to the defendant's house, so that he could test whether the modding worked. In doing so, he broke the same law that the defendant was charged under (the DMCA).

Actually this is one of the reasons why the judge went all Rambo on the government the day before the dismissal. Both the ESA witness and another witness from Microsoft openly admitted to wilfully breaking the DMCA, yet here they were testifying against someone else for doing the same thing. (The Microsoft employee admitted to having modded Xboxes himself when he was at college.)